BHP Cuts Employee Incentives By 20%

BHP, a mining company, is reportedly cutting short-term incentives for all employees by 20 per cent for the 2023-24 fiscal year, according to the Australian Financial Review (AFR) on Thursday.

Sources cited by AFR attribute the reduction to BHP's failure to meet internal performance targets. The company's management linked the cutback to missed cost and production goals in certain divisions and an incident that resulted in the death of a worker at the Saraji coal mine in Queensland in January.

Some BHP employees, as reported by AFR, expressed dissatisfaction with the incentive reduction, highlighting hiring freezes in some divisions that hampered the ability to meet targets and criticising what they perceive as unrealistic internal goals.

This is not the first instance of BHP reducing employee incentives globally. In 2019, the company also slashed them by 20 per cent due to various operational mishaps, including a train derailment in Western Australia in November 2018 and a fatality at the Saraji coal mine a month later. Then-CEO Andrew Mackenzie saw his annual pay decrease by almost a quarter by the end of 2019 due to additional issues like equipment failures at the Olympic Dam in South Australia and the Escondida mines in Chile.

Last year, CEO Mike Henry pledged to enhance safety measures across all operations following more fatalities. In February, BHP reported that profits for the first half of the year were affected by a $2.5 billion impairment charge related to its nickel business in Western Australia and another $3.2 billion in payments associated with the Samarco dam disaster in Brazil.

As part of its cost-cutting measures, the company also announced the disbanding of certain global corporate teams.